PML Question for Self-Funded Lenders

[Tammy White]

Question for the self-funded private lenders here:

Before lending on a deal, what do you look at first?

The borrower?
The property?
The ARV?
The exit strategy?
The loan-to-value?
Something else?

I’m curious what matters most to other lenders when deciding whether a deal feels safe enough to fund.

[Seph Hancock]

From my perspective, it’s not one thing—it’s whether all the pieces work together.

That said, I usually start with the exit strategy. If the borrower can’t clearly explain how the loan gets paid off, everything else becomes less important.

After that, I look at:
• Borrower experience and track record
• Loan-to-value and equity position
• Property condition and marketability
• ARV assumptions and supporting comps
• Cash reserves and contingency plans

I’ve seen great properties fail because the borrower underestimated rehab costs or didn’t have a realistic refinance or sale strategy. I’ve also seen average deals get funded because the borrower had a strong track record and multiple exit options.

A good rule of thumb is that lenders don’t get paid for upside—they get paid for managing downside risk. The safest deals are usually the ones where the borrower, property, leverage, and exit strategy all make sense independently.

Curious to hear how other private lenders rank these factors. Does anyone put the borrower ahead of the deal itself?